What Can I Buy For 10 MS Points?

Microsoft is stealing my money from under my nose, those jerks!

by Alex Keen Feb 17th, 2011

One of the biggest problems I face each and every day is the excess funds left on Xbox Live Account. Stuck in my account for at minimum a year are 10 measley Microsoft Points. In the real world, this would be akin to having half of a quarter in your pocket. Yup, that’s right, I have 12.5 cents in my account.

This is a problem for me because I hate seeing money sitting there not being used. If it isn’t being spent than it should be saved or shared somehow. Instead, it’s just sitting there laughing at me.

“What’s the big problem?” you might say. “Can’t you just buy some virtual hat to wear?” That’s the rub you see. There is nothing on the Microsoft Marketplace for just 10 Points. Not even a fake cotton swab for my Avatar to twirl around.

What’s the deal — why would Microsoft create this currency that I can’t actually spend on stuff? Doesn’t that defeat the purpose of being a business. Not surprisingly enough, and you might have been smart enough to already figure this out, Microsoft has already come out ahead on this equation. The 10 points that I have sitting on my account has been spent – in a way.

Here’s how it works: I buy $10 worth of Microsoft Points for Microsoft. They give me a bunch of 1s and 0s that have a value that appears to match $10 just restricted to a select marketplace. As long as I spend that $10 immediately on $10 worth of content, the transaction is an even deal. If I don’t spend the full amount or if I don’t spend it right away, Microsoft makes out like a bandit.

Let’s look at the first scenario: What if I don’t spend the full amount. As I explained in my previous case, I am stuck with such a low point value that I can’t buy anything with it. This happened because I must have purchased content with an uneven point price. Perhaps I bought a sale item that screwed up the even sale. Or, maybe it was DLC that looked cheap because it wasn’t a full $5 or $10 but it still made me pay in the long end.

There are two ways that this bogus 10 points makes money for Microsoft. First, by sticking gamers with odd point values, it makes me more likely to buy more points for the next time I need to make a purchase. Psychologically, the small amount in my account reminds me that I’ll need more money the next time I need to buy something. Since 10 points has no real value to it, there is no way I could buy anything without buying in more.

The second way that Microsoft appears to make money is quite nefarious… if you don’t happen to think like an accountant. After digging around on the ‘net, I came across a fascinating take down of the MS Points system. Basically, this article (with the helps of it’s users) asserts that Microsoft uses excess points as way to turn profit. Each and every left over set of 10 points would be added together and placed in an interest-bearing account. While 10 points might not generate much interest on it’s own, imagine if every Xbox Live Account has 10 points over. We’re talking about millions of points and possible millions of dollars. Cha-ching.

Looking at the second scenario: What if I don’t spend the money immediately, a similar revelation can be made. You’ve already spent the money even though you haven’t purchased any content. Microsoft can take that $5 or $10 and again turn it over to an interest bearing account and you still haven’t purchased anything of value… more than just some random number of points.

With all of this being said, I’m not intending for this article to be a call to action. I am not aiming to bring down the monolith that is Microsoft. At this point all three of the major companies are playing this game; however, since Microsoft was the first one to reveal a marketplace strategy, they’re the company with the biggest target. All I really want is for each and every one of my pennies to earn me something of perceived value – even if that means a fake plastic gold ring for my avatar.